Striga Bets on New Estonian Regulation to Launch Crypto Banking Platform

Prashanth Balasubramanian (CTO, Founder) – Second from bottom left, and Bernardo Magnani (CEO, Co-Founder) – First from bottom left

Estonia, the startup-friendly digital nation, has revamped its crypto regulations. Striga, the crypto-banking-as-a-service platform, is moving its headquarters to take advantage of this.

The crypto regulatory landscape is consolidating in Europe. This presents enormous challenges, but even greater opportunities for the best companies to excel. This is the start of an evolution in cryptographic compliance”

— Bernardo Magnani, CEO

TALLINN, ESTONIA, May 2, 2022 / — Building a world-class crypto banking platform requires the best licenses in the market – and Estonia is ready to deliver

Striga, the new challenger in the emerging crypto-banking-as-a-service sector, has chosen Estonia for its headquarters. The Baltic country has earned a reputation for being highly digital and friendly to startups, especially cryptocurrency companies.

Although regulations have changed lately, Estonia just celebrated Glia as its 10th unicorn. Striga, after a successful 2021, is preparing to leverage the incoming prestige of the newly implemented VASP (crypto) license, with the aim of creating a crypto banking ecosystem.

This change in the regulatory framework will lead to a change in the Baltic financial ecosystem and create both a challenge and an opportunity for Lithuania to rise to the occasion. The Baltic countries could soon enter a new stage as a FinTech stronghold.

– Estonia’s state-of-the-art regulatory framework:

Estonia’s journey to the label of “incoming European Silicon Valley” arguably began with the creation of Skype in 2003. By 2005 it had become a unicorn and provided the spark, but that’s only recently that things have accelerated. Since 2020, 6 unicorns have emerged, for a total of 10 in total.

The nascent crypto industry has taken notice: a startup-friendly European country, a digital business ecosystem and regulations receptive to digital assets? Estonia looked like a blessing. So, over the last lustrous period, hundreds of crypto companies have been created.

As expected, the Financial Intelligence Unit finally understood the underlying risk of being too open to virtual asset companies. So, they passed a stringent set of new regulations in March 2022 to weed out the crypto ecosystem, purge non-compliant companies, and hold fair players accountable.

“The regulatory landscape for cryptocurrency companies in Europe is consolidating, which presents huge challenges for crypto companies, but also the opportunity for the best of them to excel. This is the start of a rapid evolution of compliance in the crypto ecosystem.
– Bernardo Magnani, CEO of Striga

– A promising Baltic opportunity:

Although this is a change in Estonia, it will have a direct impact on the entire Baltic region, especially Lithuania. In fact, it will serve as a double bridge between the two states, first for runaway companies and then for regulatory standards.

Currently, more than 400 crypto-related entities are registered in Estonia. Most operate under light regulations and will face unprecedented compliance challenges. Some have already started to settle in Lithuania and will continue to do so more and more.

This exodus of non-compliant companies will put Lithuania in a potentially compromising position. Lithuanian Chairman of the Budget and Finance Committee of the Seimas, Mykolas Majauskas, has announced his intention to strengthen the regulation of cryptocurrencies. Lithuania, following in Estonia’s footsteps, will strengthen its already prominent position as a hub for EMIs (electronic money institutions).

Businesses looking to survive will find that changing countries is not a solution, but a palliative. Eventually, they can either go through the licensing process, for which Striga hopes to become a benchmark, or partner with a licensed company.

As a benefit, companies proactive in compliance can develop a mutually beneficial relationship with regulators. In the US, Coinbase has taken a compliance-focused approach and ended its cooperation with the FCC to help them understand new crypto challenges. This same type of relationship that Coinbase has built with US regulators could be built by emerging crypto companies in Estonia.

– Striga’s route so far:

As the Estonian market evolved, Striga was in development on the other side of the world. Its history is tied to Silicon Valley, and at that time the company was fine-tuning its infrastructure through YCombinator (W21).

Now, after a successful seed round, Striga is bringing together its international team, which represents 6 countries on 5 continents, under one roof in Estonia. It comes with one goal: to create the next generation of banking services.

– Emergence of crypto-banking as a service:

Like other space pioneers, Striga relies on the new Estonian regulations as a guarantee of prestige and quality. Now on the verge of rolling out a crypto banking platform as a service, the company is focusing its resources on the crypto and fintech sectors. It will provide the infrastructure needed to launch comprehensive fiat and crypto banking solutions.

Rodrigo Carrion
[email protected]
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